On Aug. 2, the Japanese government approved a bill to remove South Korea from the "whitelist" of countries enjoying preferential treatment in trade. The move is in total disregard to various reconciliatory moves from the South Korean government in recent months. To find out a way out, Seoul proposed a joint fund to compensate surviving South Korean victims of wartime forced labor, while sending high-level delegations and a National Assembly delegation to Japan.Foreign Minister Kang Kyung-wha met her Japanese counterpart, Taro Kono, on the sidelines of the annual mistrial meeting of the Association of the Southeast Asian Nations (ASEAN) in Bangkok, Aug. 1. But they failed to narrow differences over the forced labor issue and the ongoing trade row between the two countries.Japan, however, turned down all those moves of South Korea, rejecting the joint fund proposal. Japanese representatives in a high-level meeting did not respond to South Korean deliberations. Japan also canceled a meeting with the South Korean National Assembly delegation after they arrived in Tokyo.There are two reasons which could be cited for such undiplomatic behavior of Japan. One, it was not happy with the virtual abrogation of the 2015 Japan-South Korea agreement on the "comfort women," or women and girls forced into sex slavery for Japanese soldiers during World War II. Two, Japan was upset with South Korean court rulings in 2018 that ordered Japanese firms to compensate forced labor victims. However, both issues cannot be used for Japan to justify its overreactions. Actually the agreement on the sex slavery issue was a top-down move which was done in a hurry without enough deliberation on the ground. Most South Koreans felt that rather than admitting its role in recruiting these women and girls and offering a sincere apology, Japan tried to resolve the issue by pledging compensation. A majority of South Koreans felt the deal was one of several mistakes committed by the previous Park Geun-hye administration and it was anticipated that the next South Korean administration would not be able to sustain it. As for the court judgments regarding the forced labor issue, it must be underlined that it was not a decision by the Moon administration and, even though late, President Moon Jae-in proposed a way out by creating a joint fund. It might be argued that on both issues, Japan did feel bad and one or another kind of reaction was expected. However, its recent response is not proportional and it crosses the line. Japan and South Korea have several historical and territorial disputes and most of them are quite complex. There are points in arguments of both Japan and South Korea regarding these disputes and it would not be easy to resolve them soon. Unfortunately, these disputes evoke strong emotions in both countries, and political leaders and parties will likely use them for political gains in next year's general elections. This makes the disputes more sensitive and intractable.Fortunately, so far Seoul and Tokyo have tried to keep their economic, educational, cultural and even security relations separate from these disputes as they have achieved vibrant cooperation in these areas. Japan's recent move is problematic on two counts. First, it brings historical and territorial disputes to these separated domains which would have huge implications for their bilateral relations and also for the regional cooperation and stability. Second, Japan's apparent economic retaliation is going to stoke strong nationalism in South Korea which would support aggressive and hard-line leadership in the country. Both of these are problematic but the latter one along with a few other factors appears to be more so.The Moon administration has already been challenged in domestic politics because of a prolonged economic slowdown. Moon is also under attack from his opponents for his "soft" policy toward North Korea. Critics criticize that his soft leadership has led to multiple missile tests in recent days by North Korea and Pyongyang's slow response to inter-Korean reconciliation projects such as the repatriation of war remains in the Demilitarized Zone.Furthermore, the Moon government has also been criticized for dealing with undue U.S. demand for Seoul to take a bigger share of the cost for stationing American troops here. It was reported recently that the U.S. may demand South Korea pay $5 billion for defense cost-sharing next year, compared with $923 million for this year. In the above context, it has become increasingly challenging for the Moon government to remain constructive in dealing with the Japanese moves. Behaviors of ultra-nationalists, obdurate and aggressive Japan might have grave implications for South Korean domestic politics. However difficult it might be, Seoul and Tokyo should pull out all the stops to find a viable solution to their escalating disputes through dialogue and compromise.

The author is an associate professor at Jawaharlal Nehru University, New Delhi, India. Contact him at sandipmishra10@gmail.com.